The $4 billion shipbuilding gap

The Navy faces a major shortfall in its shipbuilding budget in the decade ahead. While 10 years sounds like a lifetime in a town that alters its strategic planning on an annual basis, building a Navy of sufficient size and capability is a generational task that requires a sustained commitment measured not in years, but decades. In short, the decisions we make now determine the trajectory for the fleet we will have in the 2030s and beyond.

Just how big is this funding gap? Pull out your calculators and follow along for just one minute.

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For the last 30 years the Navy’s average annual shipbuilding budget has been $16 billion. This average rate of spending traversed the 600-ship Navy buildup of the 1980s, the defense “procurement holiday” of the 1990s, and the slow decline of the fleet over the past decade from 318 ships in 2000 to just 283 today.

In its budget, the Navy is asking for just $14 billion for shipbuilding this year and an average of that same amount over the next five years. Sequestration and the potential for further budget shortfalls put even this woefully insufficient level of funding in doubt. By contrast, the Navy estimates it will need an average of $18.8 billion per year over the next 30 years just to build and sustain a modest fleet of about 300 ships. The Congressional Budget Office estimates the shipbuilding budget will have to be even higher, at roughly $21.9 billion.

For argument’s sake, let’s simply take the average of the Navy and CBO estimates- $20.4 billion - and compare that to the 30-year spending average of $16 billion. The difference is a shortfall of roughly $4 billion between what the Navy has actually spent in recent years and what it will need to spend just to meet its minimal goals in the future. The Navy’s so-called “plan” just doesn’t add up with its budget.

Driving this shortfall are several factors. First, the Navy has been chronically under-investing in its fleet for at least the past two decades. This has not only resulted in a smaller fleet today, but it has created bigger gaps to fill in the future just to retain our current fleet size. For instance, in 2007 the Navy was able to meet 90 percent of Combatant Commander (COCOM) demands. Today, with a fleet stretched by a growing demand for maritime presence, it can meet just 51 percent of COCOM demands.

Second, the Navy has too often chosen to “push to the right” its shipbuilding plans and promise that they will be acted on sometime in the future. For instance, just a few years ago the Navy was planning to build 54 ships between FY14-FY18. Today the plan calls for only 41 ships during this same time period. This slow decrease in construction simmers as a problem that will only visibly boil over in a decade or so when years of reduced goals will have left us with only a marginal fleet incapable of supporting our national interests around the world.